Identification of the "employer" in the governmental context

Article Abstract:

The IRS has provided little guidance on the issue of when state and local government entities are separate employers for the purpose of the controlled group rules for benefit plans under IRC section 414. The guidance that is available is largely analogized from the corporate context. A governmental entity is likely to be considered separate for benefits purposes if it is a separate legal entity, has a bona fide independent existence and if it is controlled in some way, the control is done indirectly through a separate board.

Public employees, Government employees

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IRS applies lump-sum rules to determine separation from service for purposes of s. 6057 registration and disclosure requirements

Article Abstract:

The IRS ruled in PLR 9622038 that assets sales and spin-offs designed to divest a corporation of controlled entities did not trigger employee separations that would require the administrator of qualified benefit plans to file separation from service statements under IRC section 6057. The ruling also found that employees of the subsidiaries being spun-off were not entitled to a deferred vested benefit. The IRS' reasoning was based on analogy to the lump-sum distribution rules under IRC section 402(d)(4)(A).

Subsidiary corporations, Subsidiaries, Corporate reorganizations, Information returns

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